Failure to Act on Climate Change Will Hurt General Mills’ Top and Bottom Lines
General Mills, one of the largest consumer packaged food companies in the world, recently celebrated its 150th birthday in 2017. To ensure continued success over the next 150 years, the company must address the sustainability of its supply chain and the sourcing of raw materials.
Addressing climate change has significant implications for both General Mills’ bottom-line profitability and top-line revenue streams. As reported in a Nielsen Global Survey on Corporate Social Responsibility, most global consumers are willing to pay a premium to support products and companies that are committed to improving the sustainability of their products . Other studies have found that 84% of consumers seek out responsibly sourced products whenever possible . Millennials, in particular, are cognizant about purchasing brands that support their values, and have repeatedly shown that their loyalty to companies that pledge to fight climate change .
Climate change is no longer a fringe issue for consumers—rather, it is top of mind. As consumers become more and more aware of the importance of addressing climate change, it will look to big players, like General Mills, to make big strides. Failure to address these concerns will cause consumers to oust and expose General Mills’ supply chain for its role in instigating climate change, instead of recognizing General Mills’ efforts to mitigate the impact of climate change.
Current Short- and Long-Term Action Steps Undertaken by General Mills to Address Climate Change
Currently, 92% of greenhouse gas emissions linked to the General Mills value chain occur in entities that are not actually controlled by the company . These “Scope-3” emissions typically occur before General Mills has sourced the products or after consumers have disposed of the products it sells . Although technically beyond their control, General Mills has maintained its commitment to addressing climate change within the total supply chain.
What management is doing for the short-term:
- General Mills has committed to achieving net zero deforestation throughout the supply chain, an effort to conserve high carbon stock forests .
- In October 2017, the company announced plans to fund the production of a 100 mega-watts of renewable wind powerplant in rural Texas .
What management is doing for the long-term:
- General Mills also plans to partner with various organizations around the globe that will help improve the sustainability of key ingredients .
- General Mills published its plan to sustainably source all its top ten priority ingredients by 2020 .
Source: General Mills and Food Business News 
General Mills’ efforts have not gone unnoticed. In 2015, the company was named to the CDP (Carbon Disclosure Project) Climate A-list, a United Kingdom based thinktank which works to help companies reduce their emissions footprint. The Climate A-List also placed General Mills among the top 3% of corporations for their efforts in engaging suppliers to reduce emissions and mitigate climate change . In 2016, General Mills reduced the greenhouse gas emissions associated with its value chain by 2% year-over-year . Since 2010, General Mills has reduced greenhouse gas emissions by 13% .
Further Recommendations: General Mills Must Take Its Sustainability Efforts to Its New Products On Shelf
While the steps that General Mills has taken are a good start, much more is to be done to address climate change within the company’s supply chain in the short- and medium-term:
Three recommendations for General Mills moving forward:
- Recommendation #1: Mills should prioritize launching new products that do not contain ingredients known to contribute to climate change. For example, palm oil is notorious for being harvested in ways that release high amounts of carbon . Palm oil substitutes should be considered when developing new product launches.
- Recommendation #2: Mills should expand partnerships with global humanitarian organizations to ensure that all ingredients are sustainably sourced. For example, in Ghana, General Mills developed a partnership with Barry Callebaut, an organization that helps to develop sustainable cocoa farming practices in the region . These types of partnerships should be expanded across the globe.
- Recommendation #3: Mills must work to educate consumers about the importance of reducing the detrimental effects of climate change. Packaging, branding, and messaging are critical to helping consumers understand the impact of climate change on the products that they love. Ensuring that the products sold on shelf highlight the importance of sustainability will not only drive sales, but will simultaneously educate consumers about what they can do to help drive positive change as well.
As the effects of climate change become more and more pronounced, consumers may wonder whether big companies such as General Mills are doing more good or creating more harm. How can big companies successfully demonstrate their commitment to addressing climate change while continuing to grow their top and bottom lines?
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